Tuesday, December 11, 2012

High Court decision in Mighty River Power case

Justice
Ronald Young has issued his decision in the High Court litigation brought by
the New Zealand Māori Council to challenge the Government’s decision to proceed
with the sale of shares in Mighty River Power (New Zealand Māori Council v Attorney-General, available on the Courts of NZ website).
Justice Young found that none of the decisions taken by the Crown to
advance the sale of those shares were reviewable, that is, those decisions
could not be reviewed by the courts.
Furthermore, Justice Young concluded that even if the decisions were
reviewable, none of the grounds for review that were argued by the Māori
Council would succeed.

The
New Zealand Māori Council (joined by the Waikato River and Dams Claims Trust
and the Pouakani Claims Trust) sought to challenge three key decisions made by
the Crown:

(a) the direction by the Cabinet to the Governor-General to bring
into force by Order in Council the State-Owned Enterprises Amendment Act 2012.
This has the effect of changing the status of Mighty River Power (‘MRP’) from
an State-Owned Enterprise (SOE’) to a Mixed Ownership Model (‘MOM’) company;

(b) amending the constitution of MRP (and later the other SOE
companies) which currently requires 100 per cent of the shares to be held by
the Crown through the relevant Minister, to permit 49 per cent ownership by private
persons; and

(c) offering for sale and selling up to 49 per cent of the shares
in MRP.

The Māori Council contended that, with respect to each decision, the
Crown must act in a manner that is not inconsistent with the principles of the
Treaty of Waitangi. This argument was
premised on the decisions being subject to the Treaty principles provision in
either s 9 of the SOE Act or s 45Q of the Public Finance Amendment Act. According to this argument, ministerial
action would be inconsistent with the Treaty if the Crown did not first
implement protective mechanisms to provide for redress and protect Māori
proprietary rights to water and geothermal resources before making any of the
three decisions.

In the alternative, the Māori Council argued that:

there was inadequate consultation in relation to these decisions, which
was inconsistent with the principles of the Treaty;

the Crown made an error of law by taking into account the idea that
“no-one owns the water” when deciding whether its actions were consistent with
Treaty principles;

the Crown’s failure to wait for the completion of both stages of the
Waitangi Tribunal inquiry was unreasonable;

it was an error of fact or law to conclude that a sale of 49 per cent of
the shares of MRP would not be inconsistent with Treaty principles;

the intention to proceed with the sale of shares was a breach of a
legitimate expectation held by Māori that the Crown would act with utmost good
faith and actively protect Māori interests; and that

the Crown had breached the requirements of natural justice by proceeding
with the sale of shares before Māori claims to the water and geothermal
resources could be properly heard.

The Waikato River and Dams Claims Trust also argued that the Crown’s
decision to proceed with the sale of shares in MRP is a breach of s64(3) of the
Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010.

However, Justice Young determined that the Crown’s argument was
correct.He found that the decision to
bring into the State-Owned Enterprises Amendment Act into force, the
‘commencement decision’, was not subject to the Treaty provisions in either the
SOE Act or the Public Finance Amendment Act.The Crown argued that Parliament has enacted the State-Owned Enterprises
Amendment Act, delegating the decision to bring it into force to the Executive
but there is no discretion for the Executive to consider the policy decisions
that underlie making MRP a MOM company.Those policy matters have already been determined by Parliament,
including the nature of the protection of Treaty principles that are required.Justice Young notes that “Parliament’s
intention in passing the SOE Amendment Act and the Public Finance Amendment Act
was to ensure that those companies that are subject to the new MOM regime are
not subject to the s 9 SOE Act Treaty compliance requirement but to the s 45Q
Treaty compliance requirement”.As an
interesting side-note, Justice Young also points out that

“The Public Finance Amendment Act 2012 provides that MOM companies will
be subject to a Treaty inconsistency rule (at s 45Q) but one which has narrower
application than s 9 of the SOE Act.”

This is confirmation that the protection provided by s 9 of the SOE Act
were not completely transferred to the new MOM companies, despite Government
Ministers’ claims that the legislation would address Māori concerns by
including a provision that reflected “the concepts of the existing section 9 of
the SOEs Act”.

As regards to the decisions to amend the constitution of MRP (a
precondition to the sale of the shares) and to offer up to 49 per cent of the
shares for sale, Justice Young found that these decisions were not reviewable
because they were the exercise of common law powers and not statutory
powers. This was a direct application of
the principle from the 1996 Court of Appeal decision relating to the sale of
shares in Radio New Zealand.

Justice Young also rejected the Māori Council’s argument that the sale
of shares in MRP would materially affect the Crown’s ability to recognize Treaty
rights and provide redress. On this
point, Justice Young comes to a different conclusion to the Waitangi Tribunal,
which had determined that in relation to the shares plus concept, the Crown’s
ability to recognize Māori rights would be compromised. Justice Young thought that the shares plus
concept would be unworkable and did not accept the Māori Council’s submission
that if the Crown was to reject the shares plus option, it had an obligation as
a reasonable Treaty partner to come up with an alternative scheme.

Predictably, the Government has welcomed the decision, while it is being reported that the Māori Council is preparing an appeal.

Ahi-kā-roa

Ahi-kā-roa literally means "the long-burning fires". It is a Māori concept that encapsulates the idea that decision-making authority and rights associated with land are maintained through the connection to that land and the fulfillment of obligations in relation to it.

About Me

I am of Ngāti Kahungunu and Te Aitanga-a-Māhaki descent. I am a lecturer at the Faculty of Law, Victoria University of Wellington. My primary research interests relate to the Treaty of Waitangi and indigenous legal traditions. Before joining the faculty in 2006, I worked in a number of different roles at the Waitangi Tribunal, Māori Land Court, and the Office of Treaty Settlements. I have recently completed a PhD through the University of Victoria, British Columbia. My dissertation is entitled 'The Treaty of Waitangi Settlement Process in Māori Legal History'. I am the Co-Editor of the Māori Law Review